Pacific Biosciences Stumbles As The U.K. Raises Concerns About Illumina's Bid

While a quick look at their respective market caps would perhaps suggest that Illumina’s (ILMN) acquisition of Pacific Biosciences (PACB) (“PacBio”) is no big deal, regulators in the U.K. don’t seem to agree, as the country’s antitrust office (the Competition and Markets Authority, or CMA) has notified the companies that it will likely move to a Phase II review of the deal. At best, such an extension will delay the close of the deal. At worst, the deal will be rejected and PacBio will be forced to go it alone.

I highlighted this risk in my last article on PacBio, and I can’t say I’m that altogether surprised by it. The good news, such as it is, is that doubts about the deal reaching completion have already been priced in and the company does still have a worthwhile future on a standalone basis. While I believe that the CMA’s objections are off-base and that PacBio now trades below standalone fair value, this remains a situation with above-average risk and volatility.

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Pacific Biosciences Stumbles As The U.K. Raises Concerns About Illumina's Bid